1. Production possibilities for two furniture producers and merchants, Edward and Samoa's, are shown in the table below. Suppose that both Edward and Samoa's are initially independent producers. Edward is producing 80 chairs and 10 tables. Samoa is producing 60 tables and 15 chairs.

Edwards production possibilities (monthly)		Samoa's production possibilities (monthly)
Chairs	Tables	Chairs	Tables
100	0	75	0
80	10	60	15
60	20	45	30
40	30	30	45
20	40	15	60
0	50	0	75

Edward and Samoa are considering an arrangement of specialization and trade. What will happen if they specialize according to comparative advantage and agree on a trade of 15 chairs for 10 tables?

Options:

a	Samoa will produce 80 chairs and trade 10 to Edward in exchange for 15 tables.
b	Samoa will produce 100 tables, keep 85, and trade 15 to Edward in exchange for 10 chairs.
c	Edward will have the same number of tables as before the trade, but after the trade, he will have more chairs.
d	Samoa will have the same number of tables as before the trade, but after the trade he will have more chairs.

2.When the price of good A is $11, the quantity of good B purchased is 2,100. What is the cross elasticity of demand between goods A and B when the price of good A is $9 and the quantity of good B purchased is 1,900?

(a) 0.5 (b) 0.6 (c)1.8 (d)2.0

3. Consider the information provided in the table and graph for the market for concert tickets. What is the market-clearing or equilibrium price and the equilibrium quantity in units?

Market demand and supply for concert tickets
Price	Quantity demanded	Quantity supplied
$30	1,200	600
$35	1,000	700
$40	800	800
$45	600	900
$50	400	1,000

(A)30 and 1200

(B)40 and 800

(C)50 and 700

(D)50 and 1000

4.Consider the market for rental housing in the city of Carpendale. The quantities demanded and supplied are given in the table. In a well-functioning market for rental housing, the market-clearing price would be $700 and the market-clearing quantity would be 900 rental units.

Market for Rental Housing
Price	Quantity Demanded	Quantity Supplied
$1,000	600	1,200
$900	700	1,100
$800	800	1,000
$700	900	900
$600	1,000	800
$500	1,100	700
$400	1,200	600

The government of Carpendale decides to set a price ceiling on the monthly rental price of $600. What will happen to the rental housing market?

a	The demand for rental housing will exceed the quantity supplied, resulting in a surplus of rental housing.
b	The demand for rental housing will exceed the quantity supplied, resulting in a shortage of rental housing.
c	The rental housing supplied will exceed the quantity demanded, resulting in a shortage of rental housing.
d	The rental housing supplied will exceed the quantity demanded, resulting in a surplus of rental housing.